MNI BRIEF: China Keeps Fiscal Expansion Similar To 2025 - NPC

China will continue to implement a more proactive fiscal policy in 2026, keeping fiscal expansion roughly in line with last year though falling short of market expectations.

The deficit-to-GDP ratio is set at around 4%, allowing for a government deficit of CNY5.89 trillion, CNY230 billion higher than last year, according to the Government Work Report delivered by Premier Li Qiang during the opening session of the National People's Congress in Beijing on Thursday.

The quota for ultra-long-term special treasury bonds and local government special bonds was kept at last year’s levels of CNY1.3 trillion and CNY4.4 trillion, below expectations for a moderate increase. Meanwhile, the quota for special treasury bonds aimed at replenishing capital at large state-owned commercial banks was reduced by CNY200 billion to CNY300 billion this year. (See MNI: China NPC To Unveil More Off-Deficit Debt, Rate Cut Eyed)